Warner Nails The Drop
| What happened and why...
Home entertainment stocks have been hitting the right notes with investors. Stuck indoors, Netflix, Spotify, and anything connected to the internet has been surging. Warner Music (+18.65%) picked their wave perfectly. The company's IPO has been ready to drop for months, and this week, it did. With Warner music owner, Len Blavatnik, cashing in on a $1.9bn share sale, that saw the stock bounced 20% on the opening bell, leaving the company momentarily valued at nearly $15bn. The music company behind Cardi B, Ed Sheeran and Bruno Mars just landed the biggest US IPO of the year, in an industry that is enjoying an unlikely renaissance... 🖐️ Five on the bounce... global recorded music revenues grew for five years in a row - $20bn last year.🧑 👩 👨 Three's a crowd... With Universal Music and Sony Music leading the way - both owned by major holding companies, Warner is the only pure-play "music stock." Warner Music is more than just what comes out of your headphones. The music company has revenue coming out its ears, but cancelled concerts in lockdown has seen Warner lose out on concert revenues and everything that comes with it. Going forward, the company's recorded music department will be the key note for investors... 🖊️ Warner signs up artists and handles the relationships with the major music streamers who pay based on the number of listens. 🎧 Recorded Music tuned in for 86% of Warner Music's revenues last year and this year it'll be way into the 90s. Oh... you think investing puts you in charge? Think again. New investors won't have any say over the direction of Warner's travels. Billionaire-owner, Len Blavatnik, may have given up his shares but he hasn't given up his power. He will retain firm control of the group through supervoting shares. | The Takeaway Some timely album drops in lockdown have fuelled some double-digit growth compared to last year. More streaming means more money. With significant Asian artists on their books and growth markets well covered, investors didn't waste any time getting excited about a rare IPO, at the right time. The company's value grew by $2.5bn on the first day of listing and when live events do return to supplement the digital revenues, investors might just double-down. The Footwear Dream Team Green Machine | What happened and why... Leading B-Corp and start-up dwelling, Allbirds, has teamed up with Adidas (+9.11%) to deliver ethical vibes to the masses. It's not every day that you see competitors shaking hands to collaborate but that is exactly what they've done. Fad Vs. Fiction... Allbirds - the eco-comfort leader founded by New Zealand soccer-star, Tim Brown - made a decision that didn't sit too well with the purists. Some smeared it as another opportunity for Adidas to Green-wash their carbon-footprint. Well, we'll let you be the judge, as there could be a bigger picture at play... 👣 Big Footprint... According to Adidas, the carbon footprint of trainers and shoes knocked out by the world's sportswear giants is reported to be around 14 kg of CO2 per pair. Allbirds is nearly half that. So they could use the help.🧠 Bringing scale and brains together... Together Allbirds and Adidas are looking to spit out the lowest carbon footprint performance show ever. | The Takeaway Dream team or Greenwash...? When the announcement landed, investors, retailers, and eco-warriors stood up and took note. Adidas and Allbirds have been going head-to-head in some respect since Allbirds started mopping up the casual footwear market. For Allbirds and their mission, it is another step in proving that comfort, good design, and sustainability don't have to be mutually exclusive (and available to everyone). For Adidas, it is an opportunity to learn and adapt, while building a bridge with the sustainable market. Kylie J Caught Up In Forbes Fraud | What happened and Why... Kylie Jenner went all Donald Trump on us. Forbes recently claimed Jenner had seriously exaggerated her unicorn status. While sticking with the tag of the highest-earning celebrity of 2020, thanks to the sale of Kylie Cosmetics, KJ's rep certainly took a hit. Two years ago, Forbes was quick to glamourise the now 22-year-old and just last year they championed her as "The Youngest Self Made Billionaire Ever. What a difference a year makes... 💰 January Bonus...the 51% sale of Kylie Cosmetics to beauty behemoth Coty, netted the Kardashian family-member a cool $540m.🤥 Change of Tune... Earlier this week, Forbes published an article titled 'Inside Kylie Jenner's Web of Lies'. Ouch. With Coty sharing its financial accounts publicly this week, it turns out Jenner trebled the actual company revenues when speaking to the media before the Coty sale. So, either Coty paid a fortune for a "high growth brand" whose sales shrank from $330M to $125M in one year — or, as Forbes likes to suggest, Coty's tax return is proof of forged value. In summary, Jenner still the richest celebrity out there and she may have told a few porkies along the way... whether she told the same fibs in the accounts to Coty, is a whole different ball-game. | The Takeaway Reputations at risk... For Jenner and Coty, reputations are on the line. Kylie Cosmetics was a private company without the requirements to public present financial information. What Jenner said out in the open is one thing, what they shared in the books (and signed) with Coty is what matters.Coty reported that Christopher Honnefelder, Kylie Cosmetics incoming CEO, has stepped down from the role (before he had the chance to step up).
